Please help with step 2 in this case study, questions 1-7

Japan Inc. Introduction The case study in Unit 1 looked briefly at Toyota. Through Japans successes via its operations management capabilities, many companies within Japan have become world class. In 1945 many of Japans cities and factories were reduced to little more than rubble. Goods of all kinds, including food, were scarce. Inflation was running at around 100 per cent per year. The major economic transformation began in about 1949, and was greatly dependent upon a range of operations capabilities that were performed simultaneously to very high standards. The term economic miracle is one that best describes the remark-able attainments in manufacturing and trade that the Japanese people achieved in the decades after World War II.

When the American market was opened to Japan in the 1950s, very few people could have anticipated Japans extraordinary economic growth, via the high quality of its products, or the competition it would pose to American manufacturers. Indeed, the danger to Japan, as Americans became concerned about an imbalance of trade, was over-dependence on the USA as a market for its goods. Many Japanese companies have become household names: Sony, Panasonic, Toshiba, Toyota, Honda, Nissan, Fujitsu, Mitsubishi, Canon, Hitachi and many others. The manufacturing focus In 2000, slightly less than 25 per cent of Japans labor force was employed in manufacturing. Most Japanese manufacturing units comprise small workshops, often family-owned and employing only very few workers. Factories employing more than 300 workers which are less than 1 per cent of the total number account for about 50 per cent of Japans industrial production. Conversely, about 60 per cent of the workers are in firms that employ fewer than 100 people.

The Japanese became the leading makers of electronic equipment, such as radios and television sets, calculators, microwave ovens, watches and photocopiers. Japan is also a leading producer of industrial chemicals, pharmaceuticals, chemical fertilizers, and petrochemical products, such as plastics, synthetic fibres and synthetic rubber. Japanese oil-refining capacity has grown to the third largest in the world. Japan is also a major world producer of cement. Large amounts of Japanese-made plate glass, firebrick, asbestos products, fibreboard and other construction materials find application within the nations fast-growing cities. The Japanese iron and steel industry, vital to the development of all manufacturing, grew spectacularly in the 1950s. By the mid-1950s, Japan was building 50 per cent of the worlds new shipping. This industry went into a slump from the 1970s, and has never made a full comeback. South Korea proved to be a strong competitor, and shipping suffered from over-capacity around the world. Five corporations accounted for more than 80 per cent of Japans steel output. Japans abilities in manufacturing were based upon a range of capabilities described in previous chapters. Making best use of limited resources This is a recurring theme, and has been used largely within the focus of a single organization. In Japans case it was a whole nation that had limited resources! However, Japans short supply of natural resources did not prove to be a limiting factor on productivity. The country lacks oil, which is the basic mineral for modern industry, and most of its petroleum comes from the Middle East. Its coal is of poor quality and the supply of iron is small, while lead, zinc, potassium and phosphates must be imported. A large amount of food is also imported. All of these factors were against Japan. However, the ability to add value to its raw materials as they are turned into finished products meant that Japans economy grew despite natural shortages. What made the difference were world-class capabilities in managing supply, and quality, and extraordinary capabilities in managing and implementing strategy, which resulted in synchronization between customer demand and operations output through just-in-time. Strategy The main strategy behind the Japanese miracle has been aggressive exporting of manufactured goods to gain market share around the world. For many Japanese manufacturers, the strategy was to expand market share at the expense of immediate profit. They were often willing to let profits be minimal for some time even to post a loss in order to gain customers. The shareholders, being mainly banks, were not concerned with receiving dividends from profits. A powerful strategy for dealing with fears over exports was in the creation of transplants in key foreign sites in the USA, Europe and Latin America. Another reason for this practice was a diminished supply of manual labor within Japan. Developing countries, such as Indonesia and Thailand, had large numbers of manual laborers available. By 1991, Japan had direct foreign investment of more than 81 billion dollars. Clearly, such investment is not restricted to Japan. However, it is Japan that has made the most dramatic use of this strategy. Alliances Many large manufacturing firms formed enterprise groups called keiretsu, which are bound together through mutual stockholding and interlocking directorates. These close relationships involve manufacturing firms and the banks that are their major sources of funds. This means that ownership of corporations is much more concentrated in Japan than in the USA, since banks hold most of the shares of a company. The keiretsu also maintain relationships with smaller firms. The large manufacturers of machinery, for example, have ties to specific small workshops. These workshops receive subcontracts for work and parts from the big firms. The keiretsu are basically oligopolies a few large firms and their associated subcontractors. Innovation The success of Japanese manufacturing owes much to the willingness of their businesses to innovate. In the 30 years after 1950, Japanese corporations made more than 30 000 licensing and other technology agreements with other nations. A famous example was in 1952 when Akio Morita and Masaru Ibuka, who had started a company named Tokyo Telecommunications and Engineering, heard of an American invention called the transistor. Bell Laboratories in the USA had invented this electronic device in 1947, but American manufacturers saw little immediate potential for it. The two Japanese businessmen paid $25 000 for a license to use the transistor and within 2 years were producing transistor radios. They named the little radios Sony, and soon that became the corporate name. The changes from the 1990s By the early 1990s, the Japanese economy, especially manufacturing, found itself in a new global environment. By the 1980s, industrialization had expanded in previously underdeveloped areas, notably in Far Eastern countries. These were providing competition for Japan in its export trade, and labor costs in these countries were much less than in Japan. The partial breakdown of the keiretsu system provided the basis for another trend in the economy entrepreneurship, the starting up of new privately owned business ventures. The notion of entrepreneurship starting a new business had not been nearly as common in Japan as it has long been in the USA. In the 1990s, however, a number of universities started teaching courses on how to operate ones own business. Numerous ventures were started and met with great success. Japan is no longer the only economic powerhouse in Asia. South Korea, Taiwan, Hong Kong and Singapore (collectively called the Four Little Tigers) have very robust economies. South China was experiencing astounding growth, and there were predictions that it would become the worlds largest economy by 2010. Undoubtedly there have been major mistakes made on a financial level in Japan. However, nobody can assume that all of the world-class operations capabilities that many Japanese firms have accrued over time are now worthless. Indeed, the very foundations on which Japans future rests will depend upon these world-class capabilities in operations management.

Research what happened in this particular situation to bring this situation to the present.

Step 2: Respond to the following questions:

1. Why has the term world-class changed in meaning over time?
2. Why is managing human resources a particularly difficult task in the modern era?
3. In what ways can operations managers play an important role in ethical factors within an organization?
4. What were (at minimum 3) relevant parts, products, or processes involved in this case study?
5. What recommendations do you have regarding overcoming potential challenges and helping future growth?
6. What is the final solution?
7. What does the future look like in terms of globalization and this case study?

Write a minimum of 500 words discussing and referencing your results.